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Hi all,
Been thinking whether it is more worthwhile to use my time & $$ to find N invest in high dividend or growth stocks.
Anyone has portfolio management rules to share?
A) high dividend stocks
- SPH
- 3 SGP telcos
- sia enginnering
- sats
- reits
B) growth stocks
- osim
- challenger
- sarin
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19-02-2014, 05:44 PM
(This post was last modified: 19-02-2014, 05:46 PM by Temperament.)
To me, both also can make you better off if you do it correctly. But growth stocks are harder to find. By the time it is established as a growth stock, it is no more cheap to buy.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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I think the first thing is knowing whether the dividends or the earnings growth rate going forward are sustainable.
That'll require a fair bit of understanding the business and competitive landscape which may or may not afford you at the end of the day an idea of the value for the companies you mentioned.
But ya I agree with Temperament. Growth companies bidded up to a crazy price can be a lousy investment.
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What is the % of ur portfolio wld u be willingly to stake in companies perceived as growth co?
In my earlier days, I used to put 100% in growth stks. Nowadays I adopt a 50/50 approach.
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I think its good to learn both, there will be periods where growth stocks are undervalued and there will also be periods where dividend stocks are undervalued.
Example of growth stock being undervalued is Challenger, it was trading at 5-8 times earnings in its early years after being listed, only in recent years have it been trading at 10-12 times earnings. Osim and Supergroup also use to trade at half their PE ratios a few years back.
Same for dividend stocks, during the 2011 european crisis period many reits were selling for 10% yield and telcos were giving 5-7% You would have the opportunity to pick the higher quality ones.
You could also devote time to learn other kinda stocks such as asset, cyclical, slow growers and turn around plays.
In the current market, I think you should be able to find asset plays, cyclicals and slow growers that are trading cheap.
Cheers ^_^
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From your example, I owned some of the As but none Bs. The reason is that I could not convince myself to trust companies that earned a lot but stingy in paying dividend, this cause me to relate them to Eratat or some other S-chips which involved in creative accounting.
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Challenger has been a high dividend stock if you bought and keep holding onto it for the past few years
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I will avoid buying just for dividend now, with US tapering. If interest rates go up, dividend stocks esp those with debt like reits may be hit.
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